Independent report shows health insurance law hikes rates for small businesses, Mainers over 50
AUGUSTA – Key Democratic state lawmakers say the GOP insurance deregulation or the “rate hike law” passed last year must be repealed in light of a new independent report showing its devastating impact on small businesses and Mainers over age 50, especially in rural areas of the state.
“This law has done more harm than good and it should be repealed by the next legislature,” said Rep. Sharon Treat, D-Hallowell, who led the opposition to the bill when it was forced through in a bitter party-line vote in 2011, and has filed a bill request to repeal the law. “This independent report is proof that the law is part of a race to the bottom in health care – worse health insurance for higher costs. It picks a few winners and many losers.”
Treat added, “The law has proven to be anti-small business, anti-jobs as well as anti-rural Maine. It’s not what the doctor ordered for Maine’s economy.”
Consumers for Affordable Health Care released areport today based on insurance company filings with the Maine Bureau of Insurance. The report, entitledFew Winners, Many Losers: Evaluating the Impact of Key Provisions of Maine’s New Health Insurance Law To Date, found that Maine’s new health insurance law, PL 90, resulted in the following:
- Higher premiums for the majority (54 percent) of individual policyholders, and 91 percent ages 55-59 and 100 percent ages 60+ saw increases.
- Increases in premiums for 4,706 small businesses compared to decreases for 532 small businesses. Seventy seven percent of the businesses who received a decrease are concentrated in Cumberland and York counties and that only accounts for a little over 15 percent of the businesses in those counties. The areas with the most increases were in the counties of Aroostook, Penobscot, Piscataquis, Knox, Hancock, Lincoln, Waldo, and Washington.
- Higher premiums for the overwhelming majority (90 percent) of small business policyholders especially those with older workers or in rural areas.
- Worse product choices in the individual market.
- Higher taxes ($22 million) on all insured individuals in Maine for a reinsurance program that supported higher profits to the state’s largest insurance company for its individual product ($1.8 million)
- Weaker consumer protections to allow insurance companies to hike rates up to 10 percent without requiring prior review
Democrats strongly opposed the law because it allows insurance companies to charge significantly higher rates based on geography, age, and where they work.
“If you are a 55 year-old retiree who no longer has company health insurance and isn’t eligible yet for Medicare, you may be charged five hundred percent more than someone in their 20s because of this new law,” said Rep. Adam Goode, D-Bangor, who serves on the Insurance and Financial Services Committee. “Younger Mainers may be paying less, but it’s not for quality care. Some policies won’t even cover maternity costs.”
The law was passed with little or no input from Democrats or analysis from the Maine Bureau of Insurance.
“We opposed the law from day one,” said Sen. Joe Brannigan, D-Portland, who also serves on the IFS committee. “It is unfortunate that so many people have been hurt as a result of ramrodding a bill through that was not properly considered and written in a back room with insurance company lobbyists.”